Winnipeg's reputation as an affordable place to live is taking a beating, two newcomers from Eastern Canada say.

"I was told Winnipeg is really cheap because of the housing market," said ex-Montrealer Guillaume Demers, who is paying $800 a month for a small one-bedroom basement suite in Osborne Village. "But that's not the case anymore. I would say living in Winnipeg is as expensive as living in Montreal."

Rental market extremes

Winnipeg has the second-lowest average vacancy rate among 35 cities surveyed, at 1.1 per cent. Regina has the lowest, at 0.6 per cent, and Windsor has the highest, at 8.1 per cent.

Winnipeg has the highest vacancy rate among Manitoba's six largest urban centres. Thompson has the lowest, at zero per cent.

Portage la Prairie saw the biggest change from October last year to October this year — down to one per cent from 6.7 per cent. Brandon saw the smallest change — up to 0.6 per cent from 0.5 per cent.

Transcona has the highest vacancy rate among 12 Winnipeg neighbourhoods. Assiniboine Park and East and West Kildonan have the lowest, at 0.5 per cent each.

Vancouver has the highest average monthly rental rate for a two-bedroom apartment, at $1,237. Trois-Rivières has the lowest, at $547.

Winnipeg has the highest average two-bedroom rate among Manitoba's six largest urban centres, at $875. Portage la Prairie has the lowest, at $643.

Fort Rouge has the highest average two-bedroom rate among Winnipeg neighbourhoods, at $963, while Lord Selkirk has the lowest, at $630.

Other survey highlights

This is the 11th consecutive year Winnipeg's apartment vacancy rate has been below two per cent.

Winnipeg gained 1,314 new rental units in the past year but lost 1,255.

The losses included 292 units converted to condos. That's down from 356 in 2010.

Winnipeg had 13,289 condos in October. Of those, 13.8 per cent, or 1,828, were being rented out, rather than being owner-occupied.

Edmonton has the highest condo-rental rate in 11 Canadian cities surveyed, at 28.5 per cent.

— Source: Canada Mortgage and Housing Corp.

Melanie Ferris said she was also shocked at what she got for $900 a month when she moved back here last month from Toronto.

"I thought I'd get a luxury apartment for that price, but sadly, I was wrong."

Canada Mortgage and Housing Corp.'s latest fall rental market survey shows the average rent in Winnipeg jumped by 4.6 per cent to $754 a month from $710 in October 2010.

That's three times the 2011 provincial rent-control guideline of 1.5 per cent, and in keeping with the 3.5 to five per cent a year increases of the last five years.

The survey also showed while the overall vacancy rate has improved slightly in the past year — 1.1 per cent versus 0.8 per cent — Winnipeg still has the second-lowest rate among the 35 Canadian cities surveyed.

Demers and Ferris both said they were taken aback at how hard it was to find an apartment. Even Winnipegger Jennifer Hanson said she couldn't believe how hard it was to find a suite — or how much she had to pay.

The 22-year-old part-time student said she'd hoped to find a one-bedroom apartment in River Heights for about $675 when she looked in May. She settled for a bachelor unit for $673 a month.

"My parents had warned me the vacancy rate was really low, but I didn't think it would be this hard."

Ferris, a communications specialist with a local broadcaster, said she was also dismayed by some of the hoops she had to jump through to get her two-bedroom apartment in Osborne Village. Despite having a well-paying job and great references, her landlord insisted her parents co-sign her lease.

"It was kind of embarrassing. I'm 32 years old!" she said. "I'm pretty with it, but I found the whole thing pretty frustrating."

The president of the Professional Property Managers Association of Manitoba, which represents landlords and property managers, defended rental rates, saying they're still affordable compared to most other major Canadian cities.

Wally Ruban said the CMHC survey shows Winnipeggers can still get a two-bedroom apartment for an average of $875 a month. That's less than one-third the combined income of two minimum-wage earners, he added, which is more than acceptable by government standards.

The CMHC survey confirms the average two-bedroom rent here is cheaper than in Ottawa, Toronto, Calgary, Edmonton, Vancouver and Victoria, which are all at more than $1,000 a month, and Regina, at $932, and Saskatoon, at $966.

However, Demers was right: Winnipeg's more expensive than Montreal, where the average two-bedroom rate is $719.

CMHC said not only does Winnipeg have the second-lowest urban vacancy rate, but Manitoba has the lowest provincial vacancy rate, at one per cent. That's up from 0.9 per cent a year ago and half the Canadian average of 2.2 per cent.

"Continued rental demand from a high influx of international migrants helped offset the impact of increased outflows to other provinces and a small reduction in the rental universe between the two October surveys," said Dianne Himbeault, a CMHC senior market analyst in Winnipeg.

CMHC said there are several reasons the average rent increase is three times the provincial guideline. Rental properties built in the last 10 years and those that have had renovations or rehabilitation are exempt from the guidelines for some time. Landlords facing rising maintenance and energy costs also can ask for permission to increase rents by more than the guideline.